The COVID-19 pandemic has severely affected African economics as the IMF expects sub-Saharan African GDP to shrink by 3.2%. Nigeria and South alone expected to decline by 5.4% and 8% respectively, according to IMF forecasts.
The fund says Africa will need over $110 Billion in extra funding to deal with the pandemic of which $44 billion has not even been financed yet despite several sub-Saharan African nations signing up for debt–service relief programmes.
In April, IMF approved a $3.4 billion Rapid Financing Instrument for Nigeria to fight the COVID-19 pandemic and has disbursed a total of $10.1 billion through emergency facilities to 29 African nations in 2020 alone.
The G-20 also agreed to waive up to $14 billion in debt payment until December for most poor nations which are mostly African.
IMF’s African Chief, Abebe Aemro believes the crisis is unprecedented and believes; “our effort will have significant consequences down the road, not only in helping our members offset the immediate tragedy of the crisis but also in ensuring that people’s lives and livelihoods are not destroyed forever”.
The Economic downturn will usher in wealth inequality in Africa with 20-39 million at risk of falling into extreme poverty. World Bank forecasts 4.9 million Nigerians at risk of extreme poverty and a further 5.7 million Nigerians by 2020.
IMF expects the African economic rebound in 2021 to be smaller than the rest of the world because relief packages to Africa have been smaller compared to other economies.